Cai v Zheng (No 2)

The parties to this proceeding were Cai (appellant) and Zheng (respondent). The dispute concerned an application for restitution following an appeal. The court determining this matter was the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the respondent should be ordered to repay to the appellant a sum of money paid as a condition of a stay of a primary judgment, given that the appeal judgment ultimately awarded less than that sum. The court also considered whether it was appropriate for a single judge to deal with an application for restitution where variation of the appeal orders was sought, and whether interest should be awarded on the repayment, and if so, at what rate and from what date.

The Court of Appeal reasoned that the principle of restitution required the repayment of money paid under a judgment that was subsequently varied or set aside on appeal. The court found that the $70,000 paid by the appellant as a condition of the stay of the primary judgment exceeded the amount ultimately awarded on appeal. Therefore, the respondent was unjustly enriched by the excess amount. The court applied the principle that where a party has paid money under a judgment which is later reduced on appeal, the excess should be repaid. The court also considered the appropriate rate of interest and the timing of repayment, taking into account a pending High Court matter.

The Court of Appeal ordered that the respondent pay to the appellant the sum by which the $70,000 payment exceeded the judgment obtained on appeal, which was $52,552.09. This repayment was to bear interest at the rate prescribed by the Uniform Civil Procedure Rules from 28 February 2009 until repayment. The repayment was to be made within seven days of the High Court delivering judgment in a pending matter, unless that judgment resulted in an award of damages in favour of the respondent exceeding $70,000. The appellant was ordered to pay the respondent’s costs of the motion.